What was the member's deficit ending for Big Blue Swim School in 2024?
Big_Blue_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
old to a related party through common ownership
NOTE 4. MEMBER'S DEFICIT
The Company has historically sustained losses primarily due to the timing of revenue recognition of franchise fees and, as a result, has an accumulated member's deficit of $3,021,265 as of December 31, 2024. During the year ended December 31, 2024, the Company had cash used in operations of $2,445,570. Since inception, the Company's operations have been funded through a combination of capital contributions. Management has represented that the Company is growing and, as such, is incurring expenditures in the near term to benefit the future as developers open franchised units and as the Company looks to grow the franchisee base and expand into new markets. In addition, management has represented certain expenses could be reduced or eliminated in order to improve operating cash flows, as needed, in the future.
As of December 31, 2024, the Company had $579,182 of unrestricted cash. The Company has positive working capital of $726,835, of which $124,919 of current liabilities are related to de
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 75)
What This Means (2025 FDD)
According to Big Blue Swim School's 2025 Franchise Disclosure Document, the company had an accumulated member's deficit of $3,021,265 as of December 31, 2024. This deficit is primarily attributed to the timing of revenue recognition of franchise fees. During the year ending December 31, 2024, Big Blue Swim School's cash used in operations totaled $2,445,570.
Despite these losses, Big Blue Swim School had $579,182 of unrestricted cash and positive working capital of $726,835 as of December 31, 2024. A portion of current liabilities, specifically $124,919, is related to deferred revenue, which the company expects to recognize as revenue in the following year. The company's operations have been funded through capital contributions since its inception.
Big Blue Swim School's management believes that the company is currently growing and incurring expenditures that will benefit its future as franchisees open new units and the company expands its franchisee base into new markets. Management also indicated that certain expenses could be reduced or eliminated to improve operating cash flows if needed. The Parent company has been advised that they will continue to provide any financial assistance needed by the company should its cash flows from operations combined with its cash balances not be sufficient to meet its working capital needs.